Relevance up to 08:00 2022-03-07 UTC–5
The bitcoin cryptocurrency began a new round of decline on March 2 and at the moment has already lost $ 6,800 of its value. Thus, from our point of view, a new period of decline in this cryptocurrency has begun. We draw traders’ attention to the fact that buyers failed to overcome the $ 45,408 level three times, which is an important resistance level. Therefore, now there should be a drop below the previous local minimum, that is, below the level of $ 34,400. The difficult geopolitical situation in Eastern Europe only supported the first cryptocurrency in the world for a short period. At the moment, according to most experts, it is generally flat between the levels of $ 30,000 and $ 50,000. From our point of view, this definition is completely wrong, because we might as well say that the euro/dollar pair has been between the levels of $ 0.8 and $ 1.6 in the flat for more than 20 years. We remind you that bitcoin is a very “thin” tool. A minimal change in the mood of traders and cryptocurrency can fly up or down by $ 10,000 in a day. That is, in the context of bitcoin, it is generally very difficult to make forecasts for the next couple of weeks. Nevertheless, on the 4-hour TF, the price was fixed below the Ichimoku cloud, which is a strong signal to maintain the current trend. And the trend is now downward.
Meanwhile, it’s already March 6th. That is, in 10 days, the results of the next Fed meeting will be known, at which, with a probability of almost 100%, a 0.25% increase in the key rate will be announced. For all risky assets, this is bad news, since tightening monetary policy will lead to the fact that the profitability of other, safer assets will increase. In addition, the Fed is not just going to raise the rate 1-2 times, but to do it at least 5 times this year. Consequently, we are talking about a systematic and prolonged tightening of monetary policy. We stand by our previous opinion: in 2022, it will be extremely difficult for bitcoin to update its absolute highs. We are more inclined to leave below $ 31,100.
You should also keep in mind inflation. Last year, almost everyone said that bitcoin is the best means of hedging inflation. Let me ask then, why has bitcoin been falling for 4 months now, although inflation in the US continues to rise? After all, there was no Ukrainian-Russian conflict 2 weeks ago, so the market could not get rid of bitcoin for four months due to geopolitical tensions. Therefore, we believe that at least now the “inflation factor” is not important for investors and traders. Based on all of the above, there are no special chances for bitcoin to grow now.
The trend on the 4-hour timeframe remains downward. The price dropped below the trend line, below the Ichimoku cloud, and at the $ 40,746 level. Thus, now the way is open for her to the level of $ 31,100, and we recommend selling cryptocurrency at this time. So far, there is no reason to expect a recovery of the “bullish” trend. Absolutely all factors, technical, fundamental, geopolitical, speak in favor of the fact that the fall will continue. Reserve plan – after fixing above the level of $ 45,408.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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